Chinatown developers face foreclosure suit over condo project

(Crain’s) — A California bank is suing to foreclose on a prominent Chinatown development team over a new 60-unit condominium project in the Near South Side neighborhood.

El Monte, Calif.-based Cathay Bank is seeking more than $6 million in unpaid debt on the seven-story project known as Canal Crossing, at 2318-2322 S. Canal St., which was completed in March.

The foreclosure suit says that a venture of developers Peter Siu and See Wong, head of Wabash Development Group Corp., failed to pay off the project’s 2007 loan when it matured on April 1. The two men are also named as defendants because they personally guaranteed the loan, according to the suit filed last month in Cook County Circuit Court.

Mr. Wong writes in an email that he’s working with the bank to restructure the loan, which was made in June 2007 with a balance of $13.7 million. Mr. Wong says he’s sold 34 of the Canal Crossing units, and 11 more are scheduled to close within two months. He plans to rent out the other 15 units as apartments and says five renters are already living there.

Mr. Wong says that after he closes the 11 pending sales, the loan’s balance will be reduced to about $3.3 million, and revenue from renting 15 of the units will be sufficient to service the debt. His lawyer plans to schedule a meeting with the bank when he returns from China, where he is currently traveling.

The foreclosure suit says the bank sent a notice of default on May 24, after the loan had been modified six times between Jan. 1, 2009, and Jan. 7, 2011. The suit seeks $6 million in unpaid principal and more than $200,000 in interest and fees.

A spokeswoman for Cathay Bank, which has a branch in Chinatown, and the bank’s lawyer in the case both declined to comment.

Messrs. Wong and Siu have teamed up on several developments.

In 2008, the two won city approval for a proposed $50-million luxury hotel at 2150 S. Clark St. that would have been 15 stories, making it the tallest building in Chinatown. They’re still pursuing the project, but have scaled back plans to a 12-story building with 100 rooms, down from 175 originally, according to a story in the Chicago Sun-Times newspaper.